Capital Market and Shares
Our strategy aims at sustainably increasing the shareholder value of Fresenius Medical Care. The long-term trend of our share price shows that investors have confidence in our growth strategy and our prospects.
Within the last ten years, the price of Fresenius Medical Care’s ordinary shares has roughly quadrupled. An investor seeking long-term growth who invested €10,000 in Fresenius Medical Care ordinary shares ten years ago and reinvested the dividends would have reaped assets of €35,079 as of December 31, 2012. This reflects an average annual rate of return of 13.4%. Over the same period, the German DAX and the Dow Jones index in the U.S., for example, posted significantly smaller annual growth of 9 and 4% respectively.
The financial markets continued to be influenced by the global debt crisis in the year under review. Growing confidence in the economic development at the start of the year inspired stock markets in the first quarter of the year. With rising numbers of negative news on the budget situations of several countries in Europe and a lack of economic stimulation, prices on the stock markets began to slide significantly in the second quarter. Towards the middle of the year, robust quarterly results from many companies and improved economic data led to rising share prices – a development that continued in the fourth quarter of 2012, generating a very positive overall performance for stock prices in 2012. The DAX therefore ended 2012 at 7,612 points, an increase of 29% compared with 2011. Further information on the performance of the world’s leading stock indices can be found in table 1.3.1.
|Source: Reuters data, own calculations|
|DJ EURO STOXX 50||EUR||2,317||2,636||14%||2,660||2,069|
|DJ EURO STOXX Healthcare||EUR||435||488||12%||498||425|
|Fresenius Medical Care ordinary shares||GER||52.50||52.31||0%||59.51||50.80|
|Fresenius Medical Care ADR||U.S.||33.99||34.30||1%||38.93||32.13|
Modest performance of Fresenius Medical Care ordinary shares in the year under review
Fresenius Medical Care shares developed modestly in 2012: As of the end of the year, the price of the ordinary shares was €52.31, roughly at the same level of the previous year. This performance placed our ordinary shares among the lowest of those in the DAX. Fresenius Medical Care’s ordinary shares recorded their high for the year on July, 30 (€59.51) and their low on January, 12 (€50.80).
The debate on the future terms of the new reimbursement system for dialysis patients with national health insurance (Medicare) in the U.S., that came into force in 2011, and associated impacts on our business in future years, were the significant factors that influenced the development of Fresenius Medical Care’s share price in 2012 and especially from the middle of the year. Additionally, the discussions about the automatic budget cuts to reduce the government debt in the U.S. burdened the development of the share. Those measures also have an impact on government reimbursement levels in the healthcare system which affects the dialysis sector. Based on a bill the reimbursement rates for dialysis services in the U.S. have been reduced by 2% in March 2013 compared to the previous year.
In a very positive market environment with increasing stock quotations, defensive classified stocks only showed average performance.
The development of the share price was bolstered by the continuing positive revenue and profit performance of our Company: in 2012 we again achieved record results in revenue and earnings; see also the “Result of operations” section.
The exchange rate of the euro against the U.S. dollar continued to play an important role in the development of our share price in 2012. An appreciation of local currencies (especially the euro) against the U.S. dollar is advantageous for Fresenius Medical Care’s reporting, as we report in U.S. dollars. As a result, we benefit from higher values when our balance sheet items and earnings (in local currencies) are translated into U.S. dollars. On the other hand, the appreciation of the euro also means that several conventional valuations, which are usually calculated in U.S. dollars, are less favorable when translated into euro. This can be significant as many investors base their decisions first and foremost on the euro share price.
Share split at ADR
In 2012, the price of Fresenius Medical Care shares traded on the New York Stock Exchange (NYSE) in the form of American depositary receipts (ADR) increased by 1%. The ADR price movement is basically tied to the ordinary and preference shares, taking into account the development of the euro / U.S. dollar exchange rate. Since implementing a 2:1 share split in our ADRs in December 2012, two ordinary or respectively preference ADRs now correspond to one ordinary or respectively preference share of Fresenius Medical Care.
Development of preference shares
The price of Fresenius Medical Care’s preference shares normally develops in line with the ordinary share price. As the vast majority of preference shareholders accepted the offer to convert their preference shares into ordinary shares in February 2006, the number of preference shares outstanding and thus the volume of tradable shares is very low. As a result, any further statements regarding the price of our preference shares would be speculative.
Slight increase in market capitalization
The market capitalization of Fresenius Medical Care amounted to €15.99 BN as of December 31, 2012, and was therefore around €60 M higher than the figure for the previous year of €15.93 BN. The trading volume of ordinary shares – in line with general decrease in trading activity in DAX shares in 2012 – was down as compared with the previous year and averaged 0.68 M per trading day (previous year: 0.83 M). Due to the very small number of outstanding preference shares, their daily fluctuations are normally much beyond than those of ordinary shares.
Good positioning in DAX rankings
At the end of the fiscal year, our ordinary shares still held a good position in the rankings published by Deutsche Börse, which serve as a basis for determining the composition of the DAX. The rankings are compiled monthly based on the trading volume and market capitalization relating to the free float. At the end of 2012, our weighting in the DAX was 1.64%, and therefore slightly lower than the previous year’s value of 2.16%. This essentially reflects the weaker (relative) performance of our ordinary shares compared to other DAX companies. In terms of market capitalization, we moved down four places last year and are now ranked 19th. With regard to trading volume, we fell two places from 26 to 28.
The Fresenius Medical Care shares are included in a number of other important international share indices, such as the Dow Jones, MSCI and the FTSE. For the fourth consecutive year, our ordinary shares were listed in the Dow Jones Euro Stoxx Sustainability Index, which takes into account ecological and social as well as economic criteria.
Fresenius Medical Care intends to continue its profit- oriented dividend policy. At the Annual General Meeting on May 16, 2013, the Management Board will propose the shareholders an increase of the dividend by 9% to €0.75 per ordinary share. Subject to the approval of the Annual General Meeting the shareholders can expect an increase of the dividend for the 16th year in a row since the foundation of Fresenius Medical Care in 1996. Based on the proposed dividend and the closing prices for our shares at the end of 2012, the dividend yield for our ordinary shares should be around 1.4% (2011: 1.3%). Since 1997, the dividend should have risen by around 10% on average each year.
The total payout for 2012 would amount to approximately €230 M. With the exchange rate at the end of the financial year, the total dividend works out approximately $304 M. Based on our consolidated net income of $1,187 M, this represents a payout ratio of about 26%.
Shareholder structure still very balanced
At the beginning of 2013, we again had our shareholder structure analyzed. We were able to identify the owners of around 97% (previous year 94%) of our 306.71 M outstanding shares. With regard to the shares in free float, we were able to attribute around 96% (previous year: 92%) to individual investors.
Number of identified shares as per shareholder structure analysis
|figures rounded in M|
|Number of shares||in %||in % of free float|
|Number of shares outstanding as of December 31, 2012||306.71||100.0||-|
|of which ordinary shares||302.74||98.7||-|
|of which preference shares||3.97||1.3||-|
|Shares in free float||212.33||69.2||-|
Identified shares based on free float
At the end of February 2012, Fresenius SE & Co. KGaA announced that it had completed its purchase of 3.5 M Fresenius Medical Care ordinary shares, as it had advised in November 2011. As of December 31, 2012, Fresenius SE & Co. KGaA therefore held a total of approximately 94.4 M ordinary shares in Fresenius Medical Care. With a holding of 30.8% of the share capital, Fresenius SE & Co. KGaA is our biggest shareholder. In our shareholder structure analysis, we identified nine more institutions with an investment of more than 1% in our share capital.
Overall, we identified 897 institutional investors (previous year: 808) through the shareholder structure analysis. The top 20 institutional investors in our Company held about 45% of identified shares in the free float (previous year: 40%). Nine of the top 20 investors are based in Great Britain, while six are in the U.S., two each in Germany and France and one in Norway.
In terms of geographical distribution, 41.6% of identified shares based on free float were held by institutions in North America. 55.5% of shares were held in Europe, excluding Germany. The majority of these (28.5% of shares) were found in Great Britain. Around 8.3% of our Company’s shares were held in Germany.
Geographical distribution of identified shares
|Number of shares||in %||Number of shares||in %|
|Rest of Europe||13,311,669||7.4||13,975,306||8.2|
|Rest of the world||5,276,647||3.0||6,536,044||3.8|
Shares attributable to regions
Identified shares based on free float
The survey carried out at the beginning of 2013 reveals a shareholder structure that, in our opinion, continues to be well balanced, both from a geographical point of view and in terms of private and institutional investors. For 2013 and 2014, we see the regional focus of our investor relations activities continuing in North America and Europe, as well as in selected countries in Asia and the Middle East.
Voting rights notifications in 2012
In 2012 we received ten voting rights notifications as required by section 21(1) of the German Securities Trading Act (WpHG) as well as one voting right notification as required by section 41 (4d) of the German Securities Trading Act (WpHG). All voting rights notifications can be found on the Investor Relations section of our website www.fmc-ag.com.
Basic share data
|Ordinary share||Preference share|
|Share type||No par value bearer share||No par value bearer share|
|Germany: Frankfurt Stock Exchange / Prime Standard||FME||FME3|
|U.S.: New York Stock Exchange (NYSE)||FMS||FMS/P|
|Security identification codes|
|Securities No. (WKN)||578580||578583|
|CUSIP No. (NYSE)||358029106||358029205|
|Frankfurt Stock Exchange||FMEG.F||FMEG_p.F|
|XETRA||FME GY||FME3 GY|
|Frankfurt Stock Exchange||FME GR||FME3 GR|
|ADR NYSE||FMS US||FMS/P US|
Successful investor relations activities
Our investor relations work in 2012 again focused on delivering comprehensive, transparent and timely information to the capital markets. This included disclosing information on the strategy and management principles of Fresenius Medical Care, its operational and financial business developments, as well as the Company’s outlook to a wide audience encompassing not only shareholders, other capital market participants and analysts, but also employees, journalists and the general public. Our aim in doing this is to communicate our Company’s business performance in an appropriate and accurate manner allowing existing and potential investors to make informed investment decisions and providing other target groups with a balanced overview of the Company and its activities, its strategy and prospects. We want to make a significant contribution to increasing the value of Fresenius Medical Care in the long-term by means of effective financial communication.
Fresenius Medical Care provides all stakeholders with equal and timely access to information which may affect the share price. All communication channels aim to avoid selectively distributing any information which might have an impact on the share price. Depending on the information and recipient, Fresenius Medical Care selects the communication channel that is most suitable at that point in time for effective communication. In doing so, we fulfill the requirements of the valid laws and guidelines in both the U.S. and Germany. These include the regulations of the Deutsche Börse and the New York Stock Exchange, as well as the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG), the German Corporate Governance Code and the Sarbanes-Oxley Act. More on this and other corporate governance issues can be found in the "Corporate Governance Report".
Generally, Fresenius Medical Care does not respond to rumors relating to the Company unless it can be expected to have a significant impact on the Company’s share price or related trading activities.
In 2012, we again continued to intensify our contacts with financial analysts as well as with institutional and private investors worldwide. Financial analysts continue to express great interest in our Company. This is reflected by the fact that we are actively tracked and covered by 36 equity analysts, so-called sell-side analysts. We continue to expect the current banking and debt crisis to lead to further restructuring measures in the banks’ equity departments, which could have an impact on the amount and quality of coverage. As of the end of 2012, 15 analysts rated our shares as a “Buy”, 17 analysts voted for “Hold” and four analysts recommended investors to “Sell” their shares.
In the year under review, we presented Fresenius Medical Care in around 900 one-on-ones with analysts and investors and answered questions about our business performance and the Company’s future. In addition, we showcased the Company and its prospects at 13 roadshows and 34 investment conferences around the globe. In the second half of the current fiscal year 2013, we intend to provide our investors and analysts with comprehensive information on our Company, including our strategy and our mid-term goals as part of a Capital Market Day. In recent years, we have welcomed large numbers of analysts and investors at regular intervals at such events. Private investors also play an extremely important role. For this reason, we took part, among others, in events organized by the German Association for the Protection of Shareholders (Deutsche Schutzvereinigung für Wertpapierbesitz, DSW) for private investors.
The business year 2012 was a repeated success for the Investor Relations department of Fresenius Medical Care: Our Company was again honored for its outstanding work – despite the moderate performance of the shares during the fiscal year. The Thomson Reuters news agency awarded Fresenius Medical Care its prize for best IR work in the “Med- Tech and Healthcare” category for the seventh time in a row. A survey carried out by the U.S. magazine “Institutional Investor” ranked our Company highest in the “healthcare” category in Europe for the fifth year in succession.
On our website www.fmc-ag.com, we also provide the following information:
- price information on our shares listed on the Frankfurt and the New York stock exchanges,
- publications such as quarterly reports, annual reports, investor news, and ad hoc announcements,
- full-year and interim reports in the form of live web-casts of analyst meetings and conference calls, including corresponding information and presentation material,
- live transmission of the CEO’s speech at the Annual General Meeting,
- financial calendar with information on reporting, the Annual General Meeting and other events.
In addition, it is possible to contact us directly via e-mail on our website, for example to receive automatic updates on Company developments in the future.
Key figures for Fresenius Medical Care’s ordinary shares
|1As of December 31, 2012. 2Subject to the approval of the Annual General Meeting on May 16, 2013. 3Based on end of the year 2012. 4Weighted average number of outstanding shares.|
|Number of shares1||in M shares||302.74||300.16||298.28||295.75||293.93|
|Share prices (XETRA trading)|
|Year-end price||in €||52.31||52.50||43.23||36.94||33.31|
|Average daily trading volume||in shares||682,226||825,970||824,535||1,040,200||1,498,696|
|Share prices (ADR NYS)|
|Year-end price||in $||34.30||33.99||28.85||26.51||23.59|
|Year-end||in € M||15,986||15,930||13,143||11,045||9,919|
|Year-end||in $ M||21,092||20,621||17,270||15,911||13,787|
|Exchange rate||$ to €||1,3194||1,2945||1,3141||1,4406||1,3900|
|per share||in €||0.752||0.69||0.65||0.61||0.58|
|Dividend yield3||in %||1.4||1.3||1.5||1.7||1.7|
|Total payout||in € M||2302||210||197||183||173|
|Earnings per share (EPS)|
|Number of shares4||in M shares||301.14||299.01||296.81||294.42||293.23|
|Earnings per share (EPS)||in $||3.89||3.54||3.25||2.99||2.75|